Tightening of Lending Standards Impacts Prime Borrowers Too - 05/11/08 10:32 AM

Four times annually, the Federal Reserve surveys 84 different banks about general banking conditions.
One of the survey questions asks about current mortgage lending standards and whether they are loosening or tightening.
The chart above is from the April 2008 survey and it illustrates what we already know: It's getting tougher and tougher to get approved for a home loan.
Some of the areas in which mortgage guidelines are tightening are well-known:
More thorough income documentation Higher credit score requirements More "money in the bank" post-closing Some areas are less well-known:
More scrutiny of prior delinquencies Strict review of appraised values … (0 comments)

Parts of Inflation and Their Impact on Mortgage Rates - 05/11/08 10:26 AM

When the everyday "Cost of Living" increases, our dollars don't go as far as they used to.  Economists call this inflation.
One popular method of measuring inflation is to track prices for 84,000 individual items and lump them together into a "basket".  If the overall price is higher, then the economy is experiencing inflation.
If a picture is worth a thousand words, this one from The New York Times is worth at least 84,000. 
Broken down item-by-item, life is more expensive in some places you expected, and some places you didn't.  For example, over the past year:
Gasoline: +26% Milk: +13.3% … (0 comments)

Free Credit Reports Worth Their Cost - 05/11/08 10:19 AM

 
The ubiquity of "free" credit reporting services like FreeCreditReport.com, TrueCredit.com, and AnnualCreditReport.com have helped breed a new generation of credit-aware Americans.
Because credit ratings have more importance to everyday life than in years past, this is a welcome development.  For example:
Lenders use credit ratings to determine borrowing rates Insurers use credit ratings to determine premiums Employers use credit ratings to make hiring decision Unfortunately for Americans, though, not all credit reports are created equal.  And when it comes to actually applying for credit in the form of a new credit card or mortgage, the free reports are worth precisely … (0 comments)

MORTGAGE REPORT - 05/06/08 12:06 AM
Mortgage rates ended higher last week on stronger-than-expected jobs data, strong consumer spending, and an appetite for riskier investments.But, investors were most excited about the Federal Reserve's hint that its rate-cutting cycle may be over.The week was quiet until Wednesday when the Federal Reserve voted to lower the Fed Funds Rate by a quarter-percent. The rate cut wasn't the big news, however. Market players were most interested in Fed's press release in which it confirmed that the economy is struggling, but improving.  The remarks were both soothing and a strong contrast to the Alarmist Analysts -- the ones that make for … (0 comments)

80/20 Rule and Foreclosures - 05/01/08 10:20 PM
RealtyTrac released Q1 2008 foreclosure statistics and the data follows an interesting statistical phenomenon most commonly known as the "80/20 Rule".The 80/20 Rule states that 80 percent of the effects come from 20 percent of the causes.In this case, 80 percent of bank repossessions in the first three months of 2008 came from 20 percent of the states in the union.Accounting for 156,463 repossessed homes nationwide:California (40,023 homes)Texas (14,935 homes)Michigan (12,016 homes)Ohio (10,299 homes)Florida (10,185 homes)Georgia (8,265 homes)Arizona (7,956 homes)Colorado (7,022 homes)Tennessee (4,533 homes)Indiana (4,446 homes)Illinois (4,216 homes)Overall, 0.55 percent of homes were repossessed by banks in the first quarter. … (0 comments)

Fed Cuts Fed Funds Rate By A Quarter Point - 05/01/08 10:19 PM
The Fed lowered the Fed Funds Rate by a quarter-percent to 2.000% yesterday.Because it is tied to the Fed Funds Rate, Prime Rate also fell by a quarter-percent.  Prime Rate is now 5.000%. Holders of home equity lines of credit and credit card debt benefited from the change and will see lower interest costs in next month's statements.Mortgage rate shoppers are also benefitting.Each time the Federal Reserve cuts the Fed Funds Rate, it's meant to stimulate the economy in growth.  Too much stimulation can create too much growth and that often leads to inflation (which causes mortgage rates to rise). This … (0 comments)

Tax Deductions For Single Payment PMI - 05/01/08 10:13 PM
As you know. MI became tax deductible for 2007 and has recently been extended through 2010. This tax deductibility applies to single financed premium MI (the type of MI that is paid by the borrower, one time, up-front at the settlement table). I often get asked if this deduction is all taken in the first year or if it has to be spread out over time. On January 8, 2008, the IRS gave us guidance to answer this question. They state that a borrower should take the tax deduction for single financed premium MI over an 84-month (7-year) period. So, for … (0 comments)

 
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Kevin Whatley

Shreveport, LA

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Universal Home Mortgage

Address: 900 Pierremont Road, Suite 104, Shreveport, LA, 71106

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